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Finland signs multilateral tax treaty convention

Ministry of Finance
Publication date 8.6.2017 8.41
Press release
Kai Mykkänen.
Photo: OECD

On Wednesday 7 June, Minister for Foreign Trade and Development Kai Mykkänen signed the multilateral BEPS Convention on preventing tax base erosion and profit shifting. The aims of the changes set out in the Convention include preventing unjustified advantage being gained through tax treaties and preventing the non-payment of taxes.

In the project to tackle base erosion and profit shifting (BEPS), agreement was reached on actions to amend treaties between states on the avoidance of double taxation (‘tax treaties’). These tax treaties are intended to avoid double taxation of income. The BEPS project was launched by the Organisation for Economic Co-operation and Development (OECD) and the G20.

In order that the changes to tax treaties can be brought into effect as soon as possible, a multilateral convention was drawn up in the negotiating process, and this allows signatory countries to amend their existing bilateral tax treaties. The process, which was open to all, was engaged in by more than 100 countries and jurisdictions, including Finland. The BEPS Convention text was approved on 24 November 2016.

Signed by 68 countries

The first signing ceremony for the BEPS Convention was arranged for 7 June in conjunction with the OECD ministerial meeting. Finland duly signed the Convention along with 67 other countries.

For the BEPS Convention to affect a particular tax treaty, Finland’s bilateral treaty partner must also sign and ratify the Convention. In Finland, the Convention still requires the approval of Parliament.

Some provisions are optional

Some of the Convention’s provisions are minimum standards, and the intention is that all countries committed to the BEPS package will adopt these. Other provisions are recommendations, and the adoption of these is optional.

The BEPS Convention has been shaped in such a way that a country may decide not to adopt an optional provision given as a recommendation, and this is done by specifying a reservation regarding that provision. Furthermore, some of the minimum standards may be met in different, alternative ways.

Finland has selected those provisions of the Convention that are minimum standards: the preamble text under Article 6; the provisions of Article 7 on the prevention of treaty abuse; and the provisions of Article 16 on the mutual agreement procedure. In addition, Finland selected the provision under Article 17 on corresponding adjustments to the price tag for profit shifting, for inclusion in Finland’s tax treaties that do not yet incorporate this. Finland also selected arbitration under certain restrictions.

More information on the multilateral BEPS Convention (OECD site)

The multilateral BEPS Convention in full

Announcement concerning Finland’s reservations


Antero Toivainen, Senior Government Adviser, tel. +358 2955 30098, antero.toivainen(at)